The Week in Tech: It’s Not Easy Being a Unicorn

For the largest, most valuable start-ups in Silicon Valley, many of which plan to prove themselves and their unprofitable business models to the world by going public, there could not be a worse moment for that to happen. If Uber can’t go public, what does it mean for all the “Uber for X” companies that followed its lead?

Cracks are beginning to show. This week, two high-flying start-ups experienced a reality check in their fund-raising. WeWork sought to raise $16 billion in new funding from SoftBank, its main backer. The company wound up raising just $2 billion — still an enormous pile of cash, but a steep step down from its original plan.

And Bird, a two-year-old scooter company that was so sought-after by investors last summer that they doubled the company’s valuation in just a few weeks, is now raising funding at a flat valuation, according to Axios.

Some venture capital investors say they welcome a downturn, as I wrote this week. They’re hoarding cash and making “downturn lists” of companies to invest in once valuations become more reasonable. And some companies have seen the venture-fueled madness and decided it’s not for them.

Elsewhere this week:

■ Economists and investors are clashing over the health of the American economy. No one is debating the health of the Chinese economy, with concerns spreading to non-tech companies including Ford, FedEx, Starbucks and Tiffany, Matt Phillips writes.

■ Apple’s biggest issue is not the Chinese economy, it’s that people like the columnist Kevin Roose’s mother don’t feel the need to replace their phones every two years anymore.

■ That may explain the surprising news from CES that Apple struck deals with a number of hardware companies, including Vizio, Samsung, Sony and LG, to use its software. The deals — something the company has resisted in the past — show Apple’s ambition to make more money from content and services, as sales of its cash cow, the iPhone, slow down, Brian X. Chen writes.

■ When the government asked Palantir and Oracle to share the number of women and minorities it employs, the companies tried to hide the numbers, citing them as “trade secrets.” According to a report from Reveal News, the numbers are abysmal. (Palantir has no female executives and just one female manager.) The publication sued to obtain the letters the companies sent justifying their privacy around the issue. The Palantir letter cited fears that competitors would steal their lone female manager.